Are Likhitha Infrastructure Ltd latest results good or bad?

Likhitha Infrastructure Ltd's latest financial results for the quarter ended December 2025 reveal a challenging operational environment. The company reported a consolidated net profit of ₹9.26 crore, reflecting a significant year-on-year decline of 45.75%, marking the third consecutive quarter of profit contraction. Revenue for the same period was ₹111.40 crore, which represents a 10.90% decrease compared to the previous year, although there was a sequential growth of 8.96% from the prior quarter. The operating margin has also faced considerable pressure, dropping to 12.32% from 19.38% a year ago, indicating a substantial compression of 701 basis points. This decline in profitability metrics is concerning, as it suggests that the company is grappling with rising costs or operational inefficiencies. The profit before tax also saw a notable decline, falling to ₹12.36 crore from ₹23.04 crore year-on-year. Despite these challenges, Likhitha Infrastructure maintains a strong balance sheet with zero long-term debt and a debt-to-equity ratio of -0.18, which provides some financial flexibility. However, the company's return on capital employed (ROCE) has deteriorated sharply, indicating diminishing returns on capital deployed. The overall financial performance has prompted an adjustment in the company's evaluation, reflecting the ongoing operational difficulties and the need for improved revenue visibility and margin stabilization. The absence of disclosed order book data further complicates the assessment of future revenue potential, raising concerns about the sustainability of the business model in the current environment.